The Hopeless Failure of Medvedevinomics

The modernization rhetoric of President Dmitry Medvedev, who recently marked his two-year anniversary in office, has had no impact on everyday life in Russia. We can say for sure that the country has entered a period of stagnation, a term inextricably linked to the sclerotic era of former Soviet leader Leonid Brezhnev. Much like the dreary 1970s, time has stopped under the leadership of Medvedev and Prime Minister Vladimir Putin. The political landscape in Russia today has become frightfully similar to the Soviet Union. United Russia is looking and acting more like the Communist Party of the Soviet Union and, not surprisingly, Russia’s economic development has halted and fallen into decline.

The country’s degradation is even more pronounced in the regions. In many regions, “khans” have enjoyed nearly total authority over their “fiefdoms” for many years. Regional leaders have long since given the most profitable businesses, construction contracts and public procurement deals over to their relatives and friends. Local authorities everywhere have thrown up Potemkin villages to create the impression that they have succeeded in stimulating rapid growth in their regions. For example, the special economic zone set up in the Lipetsk region to attract high-tech investments has so far managed to launch only one new project: a plant for mass-producing beer bottles.

United Russia dominates and abuses administrative resources for regional and municipal elections. During the regional and municipal elections in March, governors openly campaigned for United Russia. There was widespread forging of election commission reports, and state employees and students were coerced into voting for the “party of power.” Amid this farce, most people in the regions are losing interest in such “elections,” and voter turnout is falling dramatically.

To make matters worse, there is little free media left in the regions. Local journalists have no venue for printing critical or investigative articles.

Moreover, political structures and most parties have degenerated into playing a subservient role to the regional governor. Local parliaments have de facto become single-party bodies completely dominated by United Russia deputies and with no more than a few deputies from the Communist Party, A Just Russia and the Liberal Democratic Party — all of whom have no influence and are, as a rule, loyal to the governor.

In addition, the situation for small and mid-sized businesses is worsening in all regions. Companies are closing down, and the unemployment rate is growing. The main causes behind the decline in business activity, aside from the generally low level of consumer demand, are the increasing costs associated with rent, utilities, taxes and credit, pervasive corruption and the raiding of businesses and private property by siloviki and government officials. This is coupled with the fact that companies with close ties to local and regional officials have been able to increase their monopolistic power over the market, allowing them huge markups on their goods despite the economic crisis.

Local authorities pay mere lip service to Medvedev’s attempt to modernize their stagnant, Soviet-like regimes. The best these leaders can do is to insert code words such as “innovation” and “nanotechnology” into their speeches, and that is where their modernization efforts end.

Near the end of Brezhnev’s rule, when the Soviet Union was stuck in political and economic stagnation, leaders put forward a string of ambitious “breakthrough” initiatives and programs. One of the most infamous examples was the much-acclaimed food program to improve the availability of meat and other food items in stores. Brezhnev’s program was introduced with much of the same pomp and fanfare that Medvedev has used with regard to his pet projects of modernization, innovation and a “smart economy.” Nonetheless, the Soviet store shelves remained as barren as they had been during the first 15 years of Brezhnev’s rule. In many cities, the food supply actually worsened after he unveiled his program.

Brezhnev and Medvedev both prove that any country ruled by an army of uncontrolled bureaucrats and monopolistic big businesses — which inevitably results in rampant corruption — will never develop.

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